For years, prices on homes and apartments in Southern California continued to rise. But as many young professionals are now priced out of the market, coastal areas like Los Angeles are experiencing “brain drain” as promising young couples and families move inland–often as far as Arizona, where they are getting more property, good schools, and their dream homes for a fraction of the cost. As a result, home prices could begin to drop and properties could stay on the market longer, putting investors in a less desirable position.
Should investors give up on Southern California? Signs point to no. “Investors can—and probably should—consider properties in Southern California,” says 5 Arch CEO Shawn Miller. “Especially if it is an area they are familiar with and have developed connections in. There is a lot to be said for working in the regions you know best.”
As always, choosing blossoming neighborhoods and pricing the property right will ensure an investor can continue to prosper on—or more likely, just off—the Gold Coast.
Consider High-Density Townhouses and Condos
Suburban infill developments— small plots of land with townhouses or single-family homes—are to the outskirts of LA what micro-MDUs—apartments under approximately 500-square-feet and part of larger buildings—are to Northern California cities: a viable solution to the lack of affordable housing in the region. These townhomes, often constructed on subdivisions only inches from one another, pack a lot of amenities into a small space.
“Millennials who are starting families are considering these properties as an alternative to fleeing even further inland, to places like Arizona or Vegas,” says Miller.
Shop in SoCal’s Hottest Counties
If you are looking for affordable fix and flip investments, consider San Bernardino County, the largest county in the U.S. and one of California’s fastest growing. “It is recognized as one of the best opportunities for fix and flip investors in the state,” says Miller.
Combined with neighboring Riverside County, San Bernardino makes up a large part of what is known as the Inland Empire. Prices in this area are lower than on the coast, but rising fast. “Investors can do well with rentals or fix and flip endeavors, because this market will be in high demand for the long haul as more and more families are priced out of coastal Los Angeles,” says Miller.
Get Ready to Take a Chance on South LA
Neighborhoods like Inglewood are set for revitalization and investors who hit the market just right could win big with rental MDUs. In addition, developers are planning a district, deemed the City of Champions, which will surround a new 100,000-seat football stadium in Englewood. With the promise of a new Metro line and all the requisite shopping, restaurants, and office space that comes with this urban renewal, opportunities may abound in the heart of South LA within the next few years.
Additionally, plans for a soccer stadium in the area, connected to other South LA neighborhoods by the new Metro line, could mean increasing demand for single-family homes, duplexes, and MDUs, with housing prices rising along with demand.
Opportunities Abound—Are You Ready?
From the Inland Empire to South LA, opportunities abound in SoCal.
“Having access to the funding you need to invest in communities under revitalization, infill developments under construction, or fast-growing Inland Empire neighborhoods can really make the difference for Southern California investors,” says Miller.
Cash In on Gold Coast Real Estate Opportunities… Get the funding you need now!